Judge rules Ogden-affiliate Craftmaster stiffed workers on overtime, prevailing wages

A firm affiliated with the Milwaukee-based developer Ogden & Company stiffed its employees of overtime wages, a federal judge has ruled in a class-action lawsuit.

U.S. District Judge Barbara Crabb ruled on Tuesday that Craftmaster Painting, a Franklin company affiliated with Ogden, had based overtime pay on the lowest rates its employees had received on any jobs, rather than the specific rates they had received on jobs for which they were owed overtime. Crabb also ruled that a group of employees had shown that Craftmaster purposely withheld wages.

The company could now be obliged to pay out three years’ worth of back pay, a sum that wasn’t spelled out in Crabb’s ruling.

The case stems from a lawsuit filed in April 2017 by three Craftmaster employees who argued the company had improperly tallied overtime payments they were owed. The lawsuit, which concerns about 100 workers, was certified as a class-action case in December 2017.

At the heart of the dispute is Craftmaster’s alleged practice of “banking” overtime hours, or postponing the payment of overtime until weeks when workers log fewer than 40 hours on the job.

Like workers at many construction companies, Craftmaster workers receive differing rates of pay depending on what type of work they are doing at any given time. Some jobs, for instance, are subject to prevailing-wage requirements and others are not.

The suit alleges Craftmaster took advantage of this situation by taking only the wages offered at the lowest-paying jobs into account when calculating overtime pay.

“Craftmaster paid the Plaintiffs for their overtime hours worked at the rate computed using either the lowest wage rate they earned during the workweek, or the rate for the type of work that they performed during overtime hours, rather than at the often higher average straight time wage rate that they earned during the workweek,” according to the complaint.

Craftmaster argued that the company president, Michael Schneble, thought the practice of banking overtime hours was common in the construction industry. Crabb rules that that practice, as well as Craftmaster’s use of the lowest wage rates when calculating overtime hours, violated the Fair Labor Standards Act and Wisconsin law.

“Defendant knew that the FLSA required it to pay its employees overtime for hours worked in excess of 40 in a week, but permitted plaintiffs to bank overtime hours to be repaid at a straight time rate without conducting any investigation, let alone an “adequate inquiry,” into whether the banking practice complied with the (law),” Crabb wrote.

Craftmaster employees also argued that the company, when working on jobs subject to prevailing-wage requirements, would both count its own contributions to employees’ 401(k) funds and claim credit for employees’ contributions to those funds when tallying the overtime amount it had to pay. What’s more, Crabb ruled that Craftmaster’s calculation of 4019(k) benefits was faulty. At the same time, she denied claims that the company had miscalculated employees’ travel expenses.

A lawyer for Craftmaster and a lawyer for its employees did not immediately return messages seeking comment by press time on Friday.